Unlike other countries on the continent, South Africa ignores the high cost of cheap chicken imports
The European Union has a long and shameful history of abusive agricultural trade practices directed at Africa and other developing regions. Its predatory approach has had a catastrophic effect and has devastated poultry farmers and producers in Africa and elsewhere.
Over the past 20 years, the EU has used its economic partnership agreements to enable their highly subsidised agricultural products to be dumped in Africa, with destructive consequences for job-starved rural communities in low- and middle income countries.
Seduced by EU promises of barrierfree access to trade with Europe, many African countries have been cajoled into lowering their own trade barriers, which protect sensitive agricultural industries such as poultry.
As soon as the ink is dry on an economic partnership agreement, EU poultry producers flood the African country with frozen poultry at prices well below the cost of production. Consumers in Europe prefer white poultry meat so there is little or no market for chicken thighs and legs. Hence EU poultry producers dump unwanted chicken parts that in Europe are essentially a waste product.
Victims of the EU’s shockingly immoral approach to trade in poultry include, to date, Cameroon, Senegal, Ghana and, more recently, South Africa. As a consequence of a flood of imports, 70% of broiler operations in Senegal closed. In Cameroon, 120 000 people lost their jobs. In Ghana, according to the Food and Agriculture Organisation of the United Nations, poultry processing plants were reduced to operating at 25% of capacity, and feed mills were reduced to 42% of capacity.
At the 2016 UN General Assembly, Ghana’s President John Mahama claimed that the imported chicken crisis was a key factor for many people migrating from Africa to Europe. Ghanaians who embark on the risky journey to Europe are poultry farmers or entrepreneurs who “sell their shops and undertake the journey because they can no longer compete with the tonnes of frozen chicken dumped on African markets annually”.
Aiding and abetting the EU trade negotiators and the multibillion-dollar poultry companies in Europe are local meat importers, who employ a small fraction of the number of people who work in the domestic poultry industry.
The importers are based primarily in urban areas and generate massive profits for themselves from cheap poultry imports. Meanwhile, it is the farmers and workers in rural areas, where unemployment is rampant,who suffer.
The devastation wrought by dumped imports is a frightening prospect for countries such as South Africa, increasingly a target for dumped products.
As African chicken consumption has risen sharply over the past two decades, sub-Saharan Africa (SSA) has been a key focus for EU chicken exports. What Africa experiences is that rising demand has been met by increased imports, not by increased local supply and job creation.
Instead, jobs decline as local industries are swamped by the flood of imports.
The EU promotes agricultural development in countries where, at the same time, its exporters are killing agricultural industries and adding to misery and poverty in areas of high unemployment.
This anomaly has been highlighted by the Danish-based Initiative for Trade and Development (IHU). A 2015 report looked at the impact of EU poultry sector policies on countries in sub-Saharan Africa.
It examined EU trade agreements, especially economic partnership agreements, which demand the systematic elimination of both tariff and nontariff barriers to EU poultry meat exports. These have resulted in the EU, one of the highest-cost producers, substantially increasing its poultry exports by dumping large volumes of brown meat chicken portions in African countries.
“In the context of recent EU trade agreements, disposal of unwanted frozen chicken parts and offal, at prices which bear little relationship to production costs in the EU, is a major source of concern in SSA countries seeking to take advantage ofrising local demand to develop local chicken production through the use of traditional agricultural trade policy tools,” reads the IHU report. “EU exports in the emerging trade policy context have the potential to undermine government and private sector efforts to develop local chicken meat production in an increasing number of SSA countries.
This raises important issues of policy coherence, given the promotion of agriculture and rural development as a focal seetor for EU development co-operation activities in SSA countries.”
The IHU report urges further discussion of the concept of a “right to development”, which would limit the applicability of World Trade Organisation obligations “when the enforcement of such obligations would have a significant adverse effect on development”.
The concept was advanced in 2013 by Joseph Stiglitz, Nobel prize-winning former chief economist of the World Bank, and Andrew Charlton. They proposed that the “right to development” should also apply to commitments entered into under bilateral trade agreements. Until trade agreements accord countries a right to development, they argue, governments must act against dumping by protecting local industries and local jobs.
In Africa and elsewhere, poultry farmers and workers, with support from their governments, are fighting back. International development agencies such as Oxfam, the World Council of Churches and European based trade unions also lend their voice to speak up against the predatory trade practices of the EU.
In Ghana, its recently completed economic partnership agreement with the EU now excludes the poultry industry. Cameroon and Senegal have imposed import bans or countervailing duties and the industry is slowly starting to recover.
In South Africa, the poultry industry has recently had a break from the devastating effect of dumped chicken because imports from Europe were temporarily banned as a result of the outbreak of avian flu in many EU countries. But this is a brief respite, not a solution to the industry’s crisis. Dumping will resume as soon as bird flu bans are lifted.
The South African government says it will do the right things to protect local producers but, as yet, has failed to act. Fighting back is an option. As Cameroon, Ghana and Senegal have proven, the livelihoods of hundreds of thousands of people in job-starved regions can be saved.
South Africa would do well to follow their lead and take the essential and decisive action that is needed.
Chris Ward is a Canadian-based health policy and international development consultant. He is a member of FairPlay, which promotes the rule of law in trade through advocacy, wherever jobs are lost and sensitive industries at risk owing to dumped imports. Previously he was Government House leader and minister of education in Canada
First published in Mail& Guardian Business on 10 November 2017